21 November , 2022 Fdiindia
India Quashes Taxes on Low-Grade Iron Ore Amid a Global Slowdown in Demand
Due to a substantial drop in the Iron ore exports and prospects of noticing further drops, India quashes export taxes on iron ore lumps and fines on iron ore with below 58% content. This was done to reverse an order that was passed in May when it had raised the tax to a steep 50% to ply to the soaring inflation.
The government also went forth to remove a 15% export tax levied upon steel intermediaries, imposed in May. Furthermore, in a consecutive move, the government also lowered the tax on Iron ore concentrates other than roasted iron Pyrites From 50% to 30%.
The impetus behind the moves was the languishing demand from china; another precedent in the whole case that forced the government to lower the taxes was the domestic markets increased dependence upon High-grade iron Ore only. And producers of low-grade ores largely depending upon the overseas market.
India's finished steel exports more than halved during the first 7 months of the fiscal year that began in April 2022. According to an insight provided by the JSW steel manufacturer, exports are to fall to an over five-year low in 2022/23. Two of the primary reasons behind the fall were a reduction in global demand due to an economic slowdown and the high import taxes levied by the government.
Some of the fastest-growing markets for Iron ore in India between 2019 and 2020 were China ($1.59B), Indonesia ($54.5M), and Malaysia ($28.7M). Major exporting competitors of iron ores were Australia $79.6 B, Brazil $26.5B, and Canada $ 5.73B.
According to published data India's country-wise iron and steel Exports were as follows.
Contraction of demand in the prime markets or Indian iron ore, including China, showcased a 70% drop in exports from April till July 2023. Other markets, such as Korea, showcased a 77?ll; Brazil showcased a fall of about 26%, and Indonesia 14%. Other than these countries, Indonesia showed a decrease of about 14%, Italy 16%, Nepal 23%, Oman 84%, and Vietnam 37%. To help the falling imports due to the overall recession in market demands, India has come forth to reduce the taxes in an approach to help the exports. A sharp fall was noticed from June onwards; data showcased that there was a 94?ll in the exports in June, 0.21 Mt versus 3.5MT exported for June 2021.